UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): March 29, 2005
Stratus
Properties Inc.
|
Delaware |
0-19989 |
72-1211572 | ||
|
(State
or other jurisdiction of incorporation) |
(Commission
File Number) |
(IRS
Employer Identification Number) |
|
98
San Jacinto Blvd., Suite 220 |
78701 | |
|
Austin,
Texas |
||
|
(Address
of principal executive offices) |
(Zip
Code) |
Registrant's
telephone number, including area code: (512) 478-5788
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
2.02. Results
of Operations and Financial Condition.
Stratus
Properties Inc. issued a press release dated March 29, 2005, announcing its
fourth-quarter and twelve-month 2004 results (see exhibit 99.1).
Item
9.01. Financial
Statements and Exhibits.
(c)
Exhibits.
The
Exhibits included as part of this Current Report are listed in the attached
Exhibit Index.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Stratus
Properties Inc.
By: /s/
John E. Baker
----------------------------------------
John E.
Baker
Senior
Vice President and
Chief
Financial Officer
(authorized
signatory and
Principal
Financial Officer)
Date:
March 29, 2005
Stratus
Properties Inc.
Exhibit
Index
Exhibit
Number
|
99.1 |
Press
release dated March 29, 2005, titled “Stratus Properties Inc. Reports
Fourth-Quarter and Twelve-Month 2004 Results.” | |
STRATUS
PROPERTIES INC. REPORTS
FOURTH-QUARTER
AND TWELVE-MONTH 2004 RESULTS
HIGHLIGHTS
| · |
Stratus
sold 139 acres of residential property for $5.6 million and an
approximately one-acre commercial tract for $0.5 million in its Circle C
community. |
| · |
Stratus
sold three residential estate lots for $1.3 million in its Barton Creek
community. |
| · |
Stratus
sold the first six lots at its Wimberly Lane Phase II subdivision for $0.9
million and the initial five lots at its Deerfield project for $0.3
million. |
|
Fourth
Quarter |
Twelve
Months |
|||||||||||
|
2004 |
2003 |
2004 |
2003 |
|||||||||
|
(In
Thousands, Except Per Share Amounts) |
||||||||||||
|
Revenues
|
$ |
9,857 |
$ |
2,605 |
$ |
20,890 |
$ |
14,422 |
||||
|
Operating
income (loss) |
2,631 |
(482 |
) |
1,560 |
180 |
|||||||
|
Net
income (loss) applicable to common stock |
2,409 |
(699 |
) |
672 |
20 |
|||||||
|
Diluted
net income (loss) per share |
$ |
0.32 |
$ |
(0.10 |
) |
$ |
0.09 |
$ |
- |
|||
|
Diluted
average shares outstanding |
7,632 |
7,128
|
7,570 |
7,315 |
||||||||
AUSTIN,
TX, March 29, 2005 - Stratus Properties Inc. (NASDAQ:STRS) reported net income
of $2.4 million, $0.32 per share, for the fourth quarter of 2004 compared to a
net loss of $0.7 million, $0.10 per share, for the fourth quarter of 2003. For
the year ended December 31, 2004, Stratus reported net income of $0.7 million,
$0.09 per share, compared with net income of $20,000, $0.00 per share, for the
year ended December 31, 2003. Net income for the twelve months ended December
31, 2004, included $0.7 million for reimbursement of certain building repairs
received from a settlement with the general contractor responsible for
construction of the 7000 West office buildings.
Revenues. Stratus’
revenues for the fourth quarter of 2004 totaled $9.9 million, including sales
within the Circle C community of 139 acres in the Meridian development for $5.6
million and an approximately one-acre commercial tract for $0.5 million.
Residential estate lot sales included two lots at the Mirador subdivision for
$0.9 million and one at the Escala Drive subdivision for $0.4 million. In
accordance with its contract with a national homebuilder, Stratus sold the first
six lots of the Wimberly Lane Phase II subdivision for $0.9 million upon the
completion of the subdivision utilities. Stratus also sold the initial five lots
at Deerfield for $0.3 million. Stratus’ revenues for the fourth quarter of 2003
totaled $2.6 million, which included the sale of a 23-acre tract within the
Circle C community for $1.25 million. For the fourth quarter of 2004, Stratus
received rental income of $0.8 million from its two fully leased 7000 West
office buildings in the Lantana project in southwest Austin, compared to $0.9
million for the fourth quarter of 2003. In addition, Stratus earned $0.3 million
in rental income related to its 75,000-square-foot office building at 7500
Rialto Drive for the fourth quarter of 2004, compared to $0.1 million for the
fourth quarter of 2003, as the occupancy rate increased from approximately 37
percent in the fourth quarter of 2003 to 97 percent in the fourth quarter of
2004. In early 2005, Stratus leased all the remaining space at the 7500 Rialto
Drive office building.
During
the fourth quarter of 2004, Stratus had other revenue, which included management
fees and sales commissions and the sale of development fee credits to third
parties, totaling $0.2 million, compared to $0.4 million for the fourth quarter
of 2003.
Development
Activities. In May
2004, Stratus entered into a contract with a national homebuilder to sell 41
lots within the Wimberly Lane Phase II subdivision. Stratus is retaining and
marketing the remaining six estate lots in the subdivision, each averaging
approximately five acres. In June 2004, the homebuilder paid Stratus a
non-refundable $0.6 million deposit for the right to purchase the 41 lots, which
has been used to pay ongoing development costs of the lots. The deposit will be
recognized as income as lots are sold. The lots will be sold on a scheduled
takedown basis, with six lots to be sold upon substantial completion of
subdivision utilities, and then three lots per quarter beginning 150 days after
the sale of the initial lots. The average purchase price for each of the 41 lots
is $150,400, subject to a six percent annual escalator commencing upon
substantial completion of development. Subdivision streets and utilities were
completed in October 2004 and the initial lot closings occurred in December
2004.
In
January 2004, Stratus acquired approximately 68 acres of land in Plano, Texas,
for $7.0 million. The property (Deerfield) is zoned and subject to a preliminary
subdivision plan for 234 residential lots. In February 2004, Stratus executed an
Option Agreement and a Construction Agreement with a national homebuilder.
Pursuant to the Option Agreement, Stratus was paid $1.4 million for an option to
purchase all 234 lots over 36 monthly take-downs. The net purchase price for
each of the 234 lots is $61,500, subject to certain terms and conditions. The
$1.4 million option payment is non-refundable, but would be applied against
subsequent purchases of lots by the homebuilder after certain thresholds are
achieved and will be recognized as income as lots are sold. The Construction
Agreement requires the homebuilder to complete development of the entire project
by March 15, 2007. Stratus agreed to fund up to $5.2 million of the
homebuilder’s development costs. The homebuilder must pay all property taxes and
maintenance costs. In February 2004, Stratus entered into a $9.8 million
three-year loan agreement with Comerica Bank to finance the acquisition and
development of Deerfield. Development is proceeding on schedule and Stratus had
$4.3 million of remaining availability under its Deerfield loan at December 31,
2004. The
initial lot sale occurred in November 2004 and four lots were sold in December
2004.
Stratus
also has commenced development activities at Circle C based on the entitlements
set forth in its 2002 Circle C Settlement with the City of Austin. The
preliminary plan has been approved for Meridian, an 800-lot residential
development at Circle C. In October 2004, Stratus received final City of Austin
plat and construction permit approvals for the first phase of Meridian, and
construction has commenced. In December 2004, Stratus sold approximately 139
acres of the Meridian development. In addition, several retail sites at Circle C
have received final City of Austin approvals and are being developed. Zoning for
Escarpment Village, a 160,000-square-foot retail project anchored by a grocery
store, was approved during the second quarter of 2004, and construction has
commenced. In December 2004, Stratus obtained an $18.5 million project loan from
Comerica Bank to fund the construction of Escarpment Village. The Circle C
Settlement permits development of one million square feet of commercial space,
900 multi-family units and 830 single-family residential lots.
During
2004, Stratus completed construction of four courtyard homes at Calera Court
within the Barton Creek community, one of which has been sold. Calera Court, the
initial phase of the “Calera Drive” subdivision, will include 17 courtyard homes
on 16 acres. The second phase of Calera Drive, consisting of 53 single-family
lots, has received final plat and construction permit approval. The development
of these lots, many of which adjoin the Fazio Canyons Golf Course, has
commenced. Development of the third and last phase of Calera Drive, which will
include approximately 70 single-family lots, is not expected to commence until
after 2005. Funding for the construction of courtyard homes at Calera Court is
provided by a $3.0 million project loan, which Stratus established with Comerica
Bank in September 2003. The project loan, which matures in September 2005, is
secured by the three remaining courtyard homes at Calera Court.
Stratus is a
diversified real estate company engaged in the acquisition, development,
management and sale of commercial, multi-family and residential real estate
properties located primarily in the Austin, Texas
area.
____________________________
CAUTIONARY
STATEMENT. This press release contains certain forward-looking statements
regarding real estate sales and development activities. Important factors that
might cause future results to differ from those projections include economic and
business conditions, the availability of financing, regulatory approvals and
environmental regulations, which are described in more detail in Stratus’ 2003
Annual Report on Form 10-K filed with the Securities and Exchange
Commission.
A copy of
this release is available on our web site,
www.stratusproperties.com.
###
STRATUS
PROPERTIES INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited)
(In
Thousands, Except Per Share Amounts)
|
Three
Months Ended |
Years
Ended |
|||||||||||
|
December
31, |
December
31, |
|||||||||||
|
2004 |
2003 |
2004 |
2003 |
|||||||||
|
Revenues: |
||||||||||||
|
Real
estate |
$ |
8,528 |
$ |
1,298 |
$ |
16,430 |
$ |
8,938 |
||||
|
Rental
income |
1,134 |
956 |
4,039 |
3,755 |
||||||||
|
Commissions,
management fees and other |
195 |
351 |
421 |
1,729 |
||||||||
|
Total
revenues |
9,857 |
2,605 |
20,890 |
14,422 |
||||||||
|
Cost
of sales: |
||||||||||||
|
Real
estate, net |
5,348 |
1,079 |
11,119 |
6,414 |
a | |||||||
|
Rental,
net |
506 |
727 |
2,053 |
b |
2,502 |
|||||||
|
Depreciation |
416 |
335 |
1,521 |
1,313 |
||||||||
|
Total
cost of sales |
6,270 |
2,141 |
14,693 |
10,229 |
||||||||
|
General
and administrative expenses |
956 |
946 |
4,637 |
4,013 |
||||||||
|
Total
costs and expenses |
|
7,226 |
|
3,087 |
|
19,330 |
|
14,242 |
||||
|
Operating
income (loss) |
2,631 |
(482 |
) |
1,560 |
180 |
|||||||
|
Interest
expense, net |
(257 |
) |
(243 |
) |
(958 |
) |
(917 |
) | ||||
|
Interest
income |
|
35 |
|
26 |
|
70 |
|
728 |
c | |||
|
Equity
in unconsolidated affiliates’ income |
- |
- |
- |
29 |
||||||||
|
Net
income (loss) applicable to common stock |
$ |
2,409 |
$ |
(699 |
) |
$ |
672 |
$ |
20 |
|||
|
Net
income (loss) per share of common stock: |
||||||||||||
|
Basic |
$ |
0.33 |
$ |
(0.10 |
) |
$ |
0.09 |
$ |
- |
|||
|
Diluted |
$ |
0.32 |
$ |
(0.10 |
) |
$ |
0.09 |
$ |
- |
|||
|
Average
shares of common stock outstanding: |
||||||||||||
|
Basic |
7,212 |
7,128 |
7,196 |
7,124 |
||||||||
|
Diluted |
7,632 |
7,128 |
7,570 |
7,315 |
||||||||
| a. |
Includes
a $1.2 million Municipal Utility District reimbursement recorded as a
reduction to cost of sales. |
| b. |
Amount
was reduced by $0.7 million for reimbursement of certain building repairs
received from a settlement with the general contractor responsible for
construction of the 7000 West office buildings. |
| c. |
Includes
interest on Municipal Utility District reimbursements totaling $0.6
million. |
I
STRATUS
PROPERTIES INC.
CONSOLIDATED
CONDENSED BALANCE SHEETS (Unaudited)
(In
Thousands)
|
December
31, |
||||||
|
2004 |
2003 |
|||||
|
ASSETS |
||||||
|
Current
assets: |
||||||
|
Cash
and cash equivalents, including restricted cash of $124
and $207, respectively |
$ |
379 |
$ |
3,413 |
||
|
Accounts
receivable |
345 |
768 |
||||
|
Notes
receivable from property sales |
47 |
60 |
||||
|
Prepaid
expenses |
40 |
194 |
||||
|
Total
current assets |
811 |
4,435 |
||||
|
Real
estate, commercial leasing assets and facilities, net: |
||||||
|
Property
held for sale - developed or under development |
104,526 |
a |
88,495 |
|||
|
Property
held for sale - undeveloped |
20,919 |
25,712 |
||||
|
Property
held for use, net |
21,676 |
21,685 |
||||
|
Other
assets |
4,140 |
1,929 |
||||
|
Notes
receivable from property sales |
789 |
b |
174 |
|||
|
Total
assets |
$ |
152,861 |
$ |
142,430 |
||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY |
||||||
|
Current
liabilities: |
||||||
|
Accounts
payable and accrued liabilities |
$ |
1,343 |
$ |
1,773 |
||
|
Accrued
interest, property taxes and other |
2,390 |
3,015 |
||||
|
Current
portion of borrowings outstanding |
1,531 |
c |
434 |
|||
|
Total
current liabilities |
5,264 |
5,222 |
||||
|
Long-term
debt |
54,116 |
d |
47,105 |
|||
|
Other
liabilities |
5,285 |
e |
3,282 |
|||
|
Stockholders’
equity |
88,196 |
86,821 |
||||
|
Total
liabilities and stockholders' equity |
$ |
152,861 |
$ |
142,430 |
||
| a. |
Includes
land in Plano, Texas (Deerfield), which was acquired in January 2004 for
$7.0 million. |
| b. |
Balance
represents long-term notes receivable related to the third-quarter 2004
sales of three residential estate lots at the Mirador
subdivision. |
| c. |
Includes
borrowings of $1.2 million from the Calera Court project loan during
2004. |
| d. |
Includes
borrowings of $5.5 million from the Deerfield loan during
2004. |
| e. |
Includes
$1.4 million and $0.6 million of non-refundable deposits related to the
Deerfield property and Wimberly Lane Phase II subdivision, respectively,
to be recognized as income as lots are sold. |
II
STRATUS
PROPERTIES INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)
(In
Thousands)
|
Years
Ended December 31, |
||||||
|
2004 |
2003 |
|||||
|
Cash
flow from operating activities: |
||||||
|
Net
income |
$ |
672 |
$ |
20 |
||
|
Adjustments
to reconcile net income to net cash provided by operating
activities: |
||||||
|
Depreciation
|
1,521 |
1,313 |
||||
|
Cost
of real estate sold |
8,938 |
4,973 |
||||
|
Stock-based
compensation |
156 |
119 |
||||
|
Long-term
notes receivable |
(615 |
) |
1,929 |
|||
|
Equity
in unconsolidated affiliates’ income |
- |
(29 |
) | |||
|
Distribution
of unconsolidated affiliates’ income |
- |
29 |
||||
|
Loan
deposits and deposits for infrastructure development |
(1,500 |
)a |
- |
|||
|
Other |
(711 |
) |
(187 |
) | ||
|
(Increase)
decrease in working capital: |
||||||
|
Accounts
receivable and prepaid expenses |
590 |
(162 |
) | |||
|
Accounts
payable, accrued liabilities and other |
948 |
b |
47 |
|||
|
Net
cash provided by operating activities |
9,999 |
8,052 |
||||
|
Cash
flow from investing activities: |
||||||
|
Development
of other real estate and facilities |
(13,257 |
) |
(12,499 |
) | ||
|
Purchase
and development of Deerfield property |
(9,341 |
) |
- |
|||
|
Municipal
utility district reimbursements |
910 |
3,504 |
||||
|
Distribution
from Lakeway Project |
- |
191 |
||||
|
Net
cash used in investing activities |
(21,688 |
) |
(8,804 |
) | ||
|
Cash
flow from financing activities: |
||||||
|
Borrowings
from revolving credit facility |
16,414 |
20,963 |
||||
|
Payments
on revolving credit facility |
(16,930 |
)c |
(16,703 |
)c | ||
|
Borrowings
from Calera Court project loan, net |
1,158 |
- |
||||
|
Borrowings
from Deerfield loan, net |
5,503 |
- |
||||
|
Borrowings
from Escarpment Village project loan |
1 |
- |
||||
|
Borrowings
from (repayments of) 7500 Rialto project loan, net |
1,904 |
(735 |
) | |||
|
Borrowings
from TIAA 7000 West project loan |
12,000 |
- |
||||
|
Payments
on 7000 West project loan |
(11,942 |
) |
(785 |
) | ||
|
Net
proceeds from exercise of stock options |
795 |
64 |
||||
|
Purchases
of Stratus common shares |
(248 |
) |
- |
|||
|
Net
cash provided by financing activities |
8,655 |
2,804 |
||||
|
Net
(decrease) increase in cash and cash equivalents |
(3,034 |
) |
2,052 |
|||
|
Cash
and cash equivalents at beginning of year |
3,413 |
1,361 |
||||
|
Cash
and cash equivalents at end of year |
379 |
3,413 |
||||
|
Less
cash restricted as to use |
(124 |
) |
(207 |
) | ||
|
Unrestricted
cash and cash equivalents at end of year |
$ |
255 |
$ |
3,206 |
||
| a. |
Includes
$0.5 million of deposits to secure loans and $1.0 million of deposits for
infrastructure development at Meridian. |
| b. |
Includes
$1.4 million and $0.6 million of non-refundable deposits related to the
Deerfield property and Wimberly Lane Phase II subdivision,
respectively. |
| c. |
Includes
payments on the term loan component which was converted to a revolver
effective June 2004. |
III